Ian Hit, First-Floor Condos Flooded: Who Pays?

SARASOTA, Fla. – Question: I live on the bottom floor of a condominium building. My unit was flooded by Hurricane Ian. The association did not carry flood insurance. Is that legal? – Unknown

Answer: Unlike hurricane wind insurance the Condominium Act does not expressly require the association to carry flood insurance. So, unless the governing documents required it, it was probably legal for the association to forego flood insurance. In the absence of flood insurance, the obligation to repair the damage will be controlled by the maintenance, repair and replacement provisions of the governing documents. However, you may be entitled to FEMA assistance for your personal Unit. You can apply for FEMA assistance at fema.gov/assistance.

Question: I am concerned that my board is signing contracts to deal with the aftermath of hurricanes. They claim because of the emergency they do not need the contract reviewed by legal counsel. What are your thoughts on this?  – S.C., Treasure Coast

Answer: I understand that boards feel extreme pressure to sign whatever document the mitigation vendor is presenting to them just to get the work started. However, under normal conditions all contracts that an association enters into should be reviewed by legal counsel first. This is even more critical now because there are many out of state vendors swooping in to claim a piece of the pie, so to speak, and the contracts often contain very problematic terms that work against the association.

Allowing legal counsel to review the contract before it is signed should not delay process if the legal counsel has experience in this area. Typical things we look for and remove are out-of-state venue clauses, one-sided indemnification clauses, allowing the vendor to have total control over the insurance proceeds, mandatory arbitration clauses and clauses that make the contract subject to another state’s laws rather than Florida law.

Question: Hi, I am wondering what happens when a condo building is condemned or damaged beyond repair from a hurricane? I understand the association must meet its deductibles with insurance companies, but what happens beyond that? Are associations required to rebuild? If not, what about the land?  – B.C., Boca Raton

Answer: That is a very good question and this is a real possibility depending on the extent of damage to your condominium. The Condominium Act in Section 718.117 provides for termination of the condominium and generally requires 80% of the owners to approve termination with no more than 5% voting against termination.

However, most condominium declarations will contain provisions on when the owners must terminate or vote not to terminate based on the extent of the damage, habitability of the units, timeframe to rebuild and the amount of available insurance proceeds to do so. You should have your association legal counsel review the TC Palm Community Law Column declaration and advise you.

If the condominium is terminated the land will typically be sold and the proceeds distributed to the owners based on the requirements in the declaration and the statute.

Richard DeBoest, Esq., is a partner of the law firm Goede, DeBoest & Cross. The information provided herein is for informational purposes only and should not be construed as legal advice. The publication of this article does not create an attorney-client relationship between the reader and Goede, DeBoest & Cross, or any of our attorneys. Readers should not act or refrain from acting based upon the information contained in this article without first contacting an attorney, if you have questions about any of the issues raised herein. The hiring of an attorney is a decision that should not be based solely on advertisements or this column.

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